The main focal point of the investment community is the persistence of deflationary forces.

The US Fed is not pleased about the fact that the US CPI is well below 2% and has not been able to get prices to rise. In the UK the CPI is also well under 2% with economic growth beginning to recede. The euro zone looks like the world’s basket-case with the CPI close to zero. And Japan, which started the year with ambitious plans for emerging from years of deflation, is struggling to meet its modest economic policy goals of a 2% inflation rate. Inflationary expectations in the rest of the world are uneven and growth is equally spotty.

The weeks ahead should give us a better idea of where the world is headed. The Fed will have its FOMC meeting on October 28-29. That is the meeting where the last batch of QE is to be ended. But it is not clear whether the Fed will come up with an alternative to give the economy a little extra boost. The signals from the Fed imply that the US economy requires more help.

Meanwhile, The ECB is making noises that it intends to push hard on the growth side, despite persistent objections from hawks like Finance Minister Scheuble and Bundesbank President Weidemann. The ECB has announced it will buy covered bonds and other instruments to provide more cash to the EU’s economies. Expectations are that this strategy will work.

Japan is lagging behind and criticism of the government’s policies is mounting. The 2% inflation target by the end of this year will not be reached and there is little evidence that shows Japan’s economy emerging from its deflation malaise.

China is also lagging behind, which will be a drag on regional and global developments.

The picture is not all bad, however. The statistics show for the most part small numbers, modest improvements. However the size of the improvements is still unnerving the global business community. People are just not used to looking at low single-digit numbers. They want numbers higher than 3%, not under 2%. But we will have to be content with these statistics for now.